Europe Can Fight Putin by Imposing Cap on Gas Price, Greek PM Says

Greek PM Kyriakos Mitsotakis repeated a call for European action to cap gas prices in an article published by Bloomberg on Monday.

While such a cap carried risks, he said, Europe must “take back control of its gas market” and cannot afford to let Russia use its market institutions against it while he warned that “the dangers of inertia compound” as winter approaches.

In his article, Mitsotakis reminds readers that fifteen EU member states have clearly expressed their support for capping prices.

Last week a letter calling for capping gas prices was signed by Belgium, Bulgaria, Croatia, France, Greece, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, and Spain.

“In normal times, governments must let markets work,” Mitsotakis said. “But these are not normal times.”

“Russia is reneging on contracts and deliberately restricting supply,” he added. “When one player can move prices, there is no sense in ‘letting markets function.’ Confronted with clear market manipulation, government intervention is not just justified but required.”

EU-wide gas price cap on imports gains traction

The calls for an EU-wide price cap on gas imports have gained traction in recent weeks after the record-breaking prices in August reached an all-time high of €346 per megawatt-hour.

Prices gradually decreased since reaching that peak and currently hover just below the €200 mark, which is almost five times the levels of only a year ago.

However, as Euronews notes, the price cap is strongly opposed by Germany and some other EU countries.

“If you introduce a price cap, as the EU unilaterally, and all the other consumers around the world don’t do it, then the gas will go to other consumers and thus we might have a shortage in gas supplies,” Germany’s Minister of State for Europe and Climate Anna Lührmann said last week.

Uncontrolled gas prices will bring devastation, Greek PM warns

Mitsotakis warned of the devastation uncontrolled prices may bring. Industries will shut down households, and small businesses will go bankrupt, he argues.

“Sooner or later, markets will balance—but without a cap on prices, the cost of that balancing will be measured in lives destroyed and jobs lost,” the PM said.

According to the Greek PM, a cap on the price of natural gas should be an upward limit on how high prices can go, not an artificially low number that will destabilize markets.

“A cap on prices carries risks, of course,” said Mitsotakis, “but as we move into winter, the dangers of inertia compound.”

“We cannot afford to sit back and watch as Russia uses our market institutions against us,” he concluded.